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Chapter 02 Appendix B Cost of Quality Answer Key
True / False Questions
1. An increase in appraisal costs will usually result in an increase in internal failure costs.
2. Prevention costs and appraisal costs are incurred in an effort to keep poor quality of
conformance from occurring.
3. Appraisal costs are incurred to identify defective products before they are shipped to
customers.
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4. Internal failure costs result when a defective product is used within the company.
5. External failure costs result when a defective product is shipped to a customer.
6. Ordinarily, managers are not aware of the magnitude of their quality costs because these
costs cut across departmental lines and are not normally tracked and accumulated by the cost
system.
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Multiple Choice Questions
7. Which of the following would be classified as a prevention cost on a quality cost report?
8. Which of the following would be classified as a prevention cost on a quality cost report?
9. Which of the following would be classified as an appraisal cost on a quality cost report?
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10. Which of the following would be classified as an appraisal cost on a quality cost report?
11. Which of the following would be classified as an internal failure cost on a quality cost
report?
12. Which of the following would be classified as an internal failure cost on a quality cost
report?
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13. Which of the following would be classified as an external failure cost on a quality cost
report?
14. Which of the following would be classified as an external failure cost on a quality cost
report?
15. Greater internal failure costs as a result of appraisal activities generally result in less:
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16. Quality costs:
17. In classifying the costs of quality, which of the following is considered an internal failure
cost?
18. An example of an internal failure cost is:
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Eade Company’s quality cost report is to be based on the following data:
19. What would be the total prevention cost appearing on the quality cost report?
20. What would be the total appraisal cost appearing on the quality cost report?
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21. What would be the total internal failure cost appearing on the quality cost report?
22. What would be the total external failure cost appearing on the quality cost report?
Eacker Company’s quality cost report is to be based on the following data:
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23. What would be the total prevention cost appearing on the quality cost report?
24. What would be the total appraisal cost appearing on the quality cost report?
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25. What would be the total internal failure cost appearing on the quality cost report?
26. What would be the total external failure cost appearing on the quality cost report?
Faast Company’s quality cost report is to be based on the following data:
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27. What would be the total prevention cost appearing on the quality cost report?
28. What would be the total appraisal cost appearing on the quality cost report?